Rupiah Completes Fifth Quarterly Drop on Current-Account Concern

Indonesia’s rupiah completed its fifth quarterly drop, the longest losing streak since 2001, as four months of trade deficits and a record current-account shortfall damped investor confidence. Government bonds advanced.

The currency was Asia’s worst performer in the past three months as official data showed imports exceeded exports by $177 million in July, from a record $1.3 billion in June. The current-account deficit reached $6.9 billion in the second quarter, the most since Bloomberg began collecting the data in 1997. Bank Indonesia will strengthen coordination with the government to narrow the gap, it said in a Sept. 13 statement.

“The risk is still in the current-account deficit,” said Rully Nova, a currency analyst at PT Bank Himpunan Saudara 1906 in Jakarta. “Investors are waiting on the sidelines for the current account to improve next quarter.”

The rupiah weakened 1.6 percent in the last three months to 9,582 per dollar as of 3:58 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency was little changed today and fell 0.3 percent this week. The rupiah will probably trade at 9,300 by year-end, Nova forecast.

One-month implied volatility, which measures exchange-rate swings used to price options, declined 175 basis points, or 1.75 percentage points, this quarter to 6.75 percent, data compiled by Bloomberg show. It was unchanged today.

The yield on the 7 percent bonds due May 2022 dropped 13 basis points, or 0.13 percentage point, this quarter to 6.02 percent, prices from the Inter Dealer Market Association show. The yield fell 24 basis points in September and lost one basis point today.

To contact the reporter on this story: Yudith Ho in Jakarta at yho35@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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